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Spotify: A Product Case Study

Spotify is currently one of the top music streaming services in the world, and was the driving force behind the industry’s shift to steaming. Spotify has 60 million users, 15 million of which pay for the service, all spread out over 58 different countries. There are 30 million songs available to listen to, and that number increases by 20,000 every day. In 2015 Spotify users streamed 20 billion hours of music, and half of that was on their phones (expandedramblings.com). Spotify is dominating the streaming market, and there are a few simple reasons why.

The Basics

If you are in the market for a streaming service and want to understand more about Spotify, this is what you need to know. Spotify is an online music (and recently podcast and video) streaming service with two basic tiers: Free and premium. The free services has a few limitations that I will mention later. Overall, Spotify gives its users access to a massive library of music that they can chose to stream from most internet capable devices. Spotify users do not pay for individual songs or albums like the traditional physical or mp3 paradigm. They pay for access to every song at once, and can listen to any song they want at any time with wifi or a cellular data plan. You can access Spotify using an in-browser web player (less popular), and by downloading the Spotify application for Mac, iOS, Android, and Windows operating systems. Spotify lets you save songs, albums, and artists to your account and organizes them similarly to iTunes and other mp3 programs. Spotify also offers a wide variety of themed playlists for you to choose from if you don’t know exactly what you want, and generates a “Discover” playlist of music you haven’t heard that it thinks you will like every week. On top of all this instant online access, Spotify users can save songs offline to their device when on wifi and listen to them later without an internet connection. All in all, Spotify is a fully featured music service that draws upon a massive library to let users pick what they want, and introduce them to music they didn’t know they liked.

Spotify For Free

Spotify makes its money in two ways: advertisements and subscription fees. Anyone can make a Spotify account for free, but their experience will be slightly different from a paid subscriber. Free listeners have access to all the same music that paid ones do, but they also have to endure advertisements. The ads are relatively invasive and come in a few different forms that vary from desktop to mobile. On your computer inside the Spotify application, free users will have banner ads on the sides, top, and bottom of the window. These static visual ads change periodically. There are also full screen ads that pop up after Spotify has been playing for a while without the user touching the computer’s controls. These ads do not interrupt playback, but obscure the entire Spotify interface and will remain as such until the user closes out of them. Although this seems intrusive, it doesn’t significantly interfere with the listening experience.

Static visual ads only appear on the desktop application, but audio and video ads are implemented on every platform. Periodically while listening to music on Spotify an audio ad will start playing in-between songs. They usually last 15-30 seconds and occur in pairs at most (but usually just one at a time). Spotify also has video ads, but they present them in a unique way. When listening to Spotify occasionally the user will hear a voice say something like “Spotify is brought to you by (company name here). Take 30 seconds to watch a short video about (product name here) and enjoy the next 30 minutes of music ad free!”. The user can chose to opt in and watch the ad, and Spotify delivers the next 30 minutes free of ads. If you wait long enough or opt out, a regular length audio ad for the product will play, and everything continues normally.

Beyond advertisements, free users have a few more limitations. They cannot save music for offline listening, and must have an internet connection to use Spotify. Specifically on mobile devices, free users cannot play specific songs on demand. They only have access to shuffle mode, and can pick what they want down to the album or playlist level. Lastly, free users can only skip 5 songs per hour. Depending on what the user wants to get out of the service, these limitations can have a varying effect on their overall satisfaction.

Premium Features

For $10/month Spotify users can enjoy a fully functional uninhibited music experience, and this is where the service really shines. First, premium customers do not have to see, hear, or watch any ads whatsoever. The screen real estate taken up by banner ads is free and makes the interface a lot less cluttered, and listeners will never be interrupted by a single audio or video ad. The benefits of this feature are clear, and it is the most well known understood upside to paying for Spotify

The second group of premium features is related to basic playback functions: premium users can listen to any song they want any time, are not restricted in the number of skips they have, and can save music offline on any device to listen to it later without internet. These features are what make Spotify a complete mp3 library replacement, and are best described with a hypothetical scenario:

Consider John, a UConn student, Spotify premium subscriber, and avid music listener. John’s friend tells him about a song he heard on the radio that he thinks he will like, and tells him to look it up on Spotify. John is in his dorm and connected to wifi, and looks up the song in the Spotify app on his iPhone. It is by an artist he has never heard before, but he trusts his friend and listens anyways. John likes the song a lot, and decides he wants to hear more of what that artist has to offer. He navigates to the album that the song is from, and saves it to his phone for offline listening. John has to leave soon and drive for two hours to get home for spring break, and this album is one of several he has saved to his phone so he can listen to music in the car without using data. He starts out his drive by listening to the new artists album, and quickly realizes that it is not for him. He switches to something else that is saved offline, and deletes the new music from his phone as soon as he arrives home.

In this scenario a Premium user is able to pick a specific song that he wants to listen to, play it on his phone, save the entire album offline and listen/skip through it in order and in the car without using any data, decide that he doesn’t like the rest of the album and remove it from his phone. Spotify premium revolutionizes the way people try out new music, because there is no risk. I can not know who John Mayer is, learn who he is and instantly start listening to his songs on demand, skip the ones I don’t like, save his entire discography to my phone and listen to it nonstop for a month, and then get burned out on his music, delete it from my phone and never listen to him for the rest of my life. Before Spotify, that entire process would have cost $80, and all of that money would have been wasted after the month of manic listening was over. With Spotify I can pay $10 and do that with John Mayer, and 10 other artists all at the same time (provided I have enough time to spare and storage space on my phone) and not waste a single cent.

Suggestion Box

Most media technology these days tend to have some kind of feature that predicts what you want based on your consumption habits, and/or offers simplified categories/playlists for those who don’t know exactly what they want. Spotify performs both of these duties quite nicely with its basic playlists and innovative ‘Discover” playlist. Spotify has a wealth of traditional playlists to offer based on a wide variety of criteria. They have the basic genre based playlists, and a selection of “charts” such as US top 50, UK top 50, Viral top 50 etc. They also have a number of more interesting playlists generated based on “moods” and activities that are associated with music that don’t lie within a specific genre. Some examples are: Chill, party, running, workout, sleep, fresh finds, focus, decades, travel, romance, and dinner. Each of these categories contain subcategories andplaylists that are more specific, for example within “dinner” there are 29 different playlists, dinnertime acoustics, jazzy dinner, dinner jukebox, picnic in the park etc. Each one is cultivated to create a category of music that makes sense to you, but you never could have imagined existed before. Spotify does an incredible job of helping users that don’t know precisely what they want find the perfect playlist to suit each moment. These in depth categories reinforce the idea that music can not only be its own activity but can follow you into every other thing you do, and gets Spotify users listening to even more.

Although these playlists seem fairly innovative, the Discover playlist is far and above the most impressive. Every Monday each Spotify user is given a 30 song playlist generated based on their listening activity. The playlist is composed of music that Spotify thinks the user will like, and does not contain anything they have listened to on the service before. Spotify has some algorithm that keeps track of what you listen to, categorizes it using a
bunch of different metrics, and then finds 30 new songs per week that you should like. In my personal experience the Discover playlist always contains music that I enjoy, and doesn’t just reinforce my genre preferences. I find that a few songs each week are clearly outside of my normal listening realm, and are attempts to introduce me to new music similar to but outside of the genres that I listen to. This is the most impressive part of the Discover playlist, and demonstrates that Spotify truly aims to widen listeners’ horizons and not just give them more of exactly the stuff they like to keep them coming back for more.

Features You Haven’t Heard of and Might Not Care About

There area few things that Spotify can do that aren’t useful very often, but are still pretty cool and worth mentioning. You can connect Spotify to social media and choose to have it notify your friends/followers what you are listening to at any given moment. Spotify can also connect to your existing iTunes music library, and if there is a song you purchased and have on your computer that isn’t available on Spotify, you can add it to your music in Spotify and even save it offline on your phone within the app. The app and desktop client also interconnect in a few more interesting ways, the most notable of which is the Connect feature. You can use the Spotify app on your phone to control it on your laptop and play m
usic from there. So if you are hosting a party you can plug your laptop into your speakers and curate the music selection from your phone as long as there is wifi. Lastly, Spotify allows Premium users to choose a higher bitrate for for their streaming and offline files if they want to. This feature is somewhat useful for audiophiles interested in always having the highest quality possible, but for casual listening I recommend keeping the bitrate relatively low to save data, bandwidth, and storage space.

Conclusions?

Spotify has the capability to be a one stop all inclusive music listening solution, and can meet most people’s needs. It has all the casual suggestive options of a service like Pandora, and the selectivity, customizability, and portability of a personal mp3 library. The final piece of the puzzle for Spotify is a detail about they pricing that sets them apart from Apple Music and other comparable services: They offer a 50% student discount to anyone with a .edu or other higher education email address. This is a HUGE plus for college students like myself who otherwise may not have paid for the service. $5/month for unlimited access to 30 million songs is a pretty sweet deal. Spotify is leading the music streaming industry in almost every respect, and it is likely they will continue to do so.